1. Field of the Invention
The subject disclosure relates to methods and systems for lottery and gaming technology in a distributed computing network, and more particularly to improved methods and systems for betting with pari-mutuel payouts while utilizing the real-time capabilities of a distributed computing network.
2. Background of the Related Art
Bookmaking is the practice of gambling on sporting events. A bookmaker or bookie is an entity that takes bets and pays winnings to the gamblers. Traditional bookmaking is generally illegal in the United States, with Nevada being a notable exception. In the United States, most bookmakers accept wagers on boxing, college sports, professional sports, horse racing and dog racing. In other countries, such as the United Kingdom, a wider range of bets is common such as outcomes of political elections, the Wimbledon tennis champion and the probability that it will snow on Christmas. Bookmaking usually pits the bookie against all bettors. In such instances, the bookie is referred to as the “house” and settles all wagers. For games of chance (e.g., card and dice games), the house is usually similarly pit against the gamblers with the house setting the odds heavily in their favor. For sporting team events, the bookmaker aims to guarantee a profit by achieving a “balanced book”, i.e., by getting an equal number of bets for each outcome. To balance the book, the house creates odds such as requiring a $55 wager to win $50. As a result of even betting on both sides, the “vigorous” (e.g., the difference between the required wager and amount won) is made by the bookmaker on half of the wagers.
Another practice is to establish a betting line or “spread” in which one team receives points that are added to their total after the competition to determine the winner. When the spread is expertly set, a higher skill level is required to succeed. However, if a bettor believes that an unlikely event will occur, such as a large underdog winning outright rather than merely by winning with the spread added to their total, the bettor is not rewarded and receives the same payout as the underdog bettor who relied on the spread.
Cooperative wagering or pari-mutuel betting is a certain type of bookmaking. Pari-mutuel betting is commonly accredited as invented in the late 19th century by Parisian perfume maker Pierre Oller. As the story goes, Oller was set on to the task by a bookmaker friend who wanted a fair system for bettors which guaranteed him a fixed profit. Unlike team sport betting, in pari-mutuel betting the gambler bets against other gamblers, not the house. In the United States, pari-mutuel gambling is very widespread and is frequently state-regulated. Horse racing, dog racing and jai lai are typical events that utilize pari-mutuel betting. Such events being of relatively short duration and having participants that finish in a ranked order are efficiently run under pari-mutuel systems.
In pari-mutuel systems, the holders of winning tickets divide the total amount of money bet on a race (the “pool”), after deductions for tax and house expenses (the “fixed profit”). The uniqueness of pari-mutuel betting lies in the fact that the payoff odds are calculated based upon how the gamblers placed their bets. For example in a horse race, if the majority of bets are on a single horse (a “favorite”) and this horse wins the race, the payoff will be low because many winners will divide the pool. Conversely, if a horse with few bets placed on it (a “longshot”) wins the race, the payoff will be high because few gamblers will split the pool. There are many different types of bets (e.g., win, place, show, perfecta, trifecta, daily double, etc.) in which case each type of bet has a pool associated therewith.
The large amount of calculation involved in pari-mutuel gambling led to invention of a specialized mechanical calculating machine known as a “totalisator” or “tote board”. The first tote board was installed at Ellerslie Racecouse, Auckland, New Zealand in 1913, and tote boards are in widespread use at race courses throughout the world. The tote board records and displays the current odds in a near real-time basis so that gamblers may be aware of the odds while considering what bets to place. The science of determining the outcome of a race is called handicapping. It is possible for a skilled player to win money in the long run at this type of gambling, but overcoming the deficit produced by taxes, the house take, and losing is difficult to accomplish and few handicappers are successful. With the popularization of the Internet and Internet gambling, off-shore bookmaking operations can offer better payoffs because of their ability to establish themselves under more favorable tax regimes and reducing their house take. Such off-shore bookmakers take as little as 1% rather than the traditional 15-18% while still turning a profit. As would be expected, skilled handicappers and novices alike seek out the improved odds.
Progressive lotteries such as the POWERBALL® game have become celebrated in the United States despite several drawbacks. For example, initial payout is low, say $10 million and the sales build very slowly. Multi-jurisdictional products try to address this problem of jackpot fatigue by simply increasing the scale of the possible purchasing public. The ceiling on the prize is also limited according to the probability of winning. In other words, if the odds are 75 million to one and 75 million people play, there will likely be a winner. The POWERBALL® game odds are 146 million to one with a record largest jackpot of $365 million. As can be seen from this data, there is an effective jackpot ceiling because as the jackpot increases, the number of players increases. Further, marketing opportunities are restricted because the timing of a winning result is never known.